The First Step to Digging out of Your Financial Nightmare

When it becomes impossible to dig out of personal debt, sometimes the best and only way out is to declare bankruptcy. If you find yourself in financial quicksand, sinking lower and lower into debt each month, the best and first thing you should do is speak with Upper Peninsula Bankruptcy Lawyers Church and Korhonen, PC at (800)758-5611 as soon as possible. All consultations are free and confidential.

When personal debt becomes too much to bear it is wise to seek help and legal guidance before making any drastic decisions. Often people are too embarrassed by their situation to ask for help, feeling they alone are responsible for the situation and that they will be judged if they seek help.

It is important for you to understand you are not alone. Millions of Americans are still struggling with debt they incurred during the Great Recession. And, a consultation with a bankruptcy attorney at Church and Korhonen, PC is free and confidential. You will not be judged. You will be educated about your options so that you can make an informed decision about the best course of action for your situation.

The most common mistake people make is trying to solve their financial problems on their own.

Many people try to do the right thing, thinking they can pull themselves out of their financial troubles. Often, this is simply not the case. And in many cases, the steps they take to help the situation only make it worse.

For example, people often turn to payday loans thinking they will be a quick fix for their financial problems. Unfortunately, payday loans can become an expensive trap if you don’t pay off the entire balance along with the requisite fees when the loan becomes due.

Michigan regulations concerning payday loans are listed here along with contact information should you need to file a complaint against a payday loan provider:

These short term fixes may lead to long term problems, propelling your financial uncertainty into a death spiral.

Currently, there is a limit to how much money you can borrow at one time but there’s no limit to how many place you can go for a loan.

Trying to get out from under those loans can be difficult, if not impossible.

Before taking out a payday loan, seek professional advice from a bankruptcy lawyer. Even if bankruptcy is not an option, a competent lawyer will be able to advise you about other options.

Also beware of companies that offer quick fixes for your money troubles. Debt consolidation companies often troll for clients on late night infomercials. Many times those companies are located in a different state and are not regulated by Michigan law. Chances are they are not going to have Michigan residents’ best interest in mind and will make promises or assurances that are too good to be true. Remember, if something sounds too good to be true, it’s probably just that: too good to be true.

Many companies offering short term loans or debt consolidation services are for profit businesses looking for ways to make profit off of you. Be sure to research any quick fix you are considering before sending one dime of your hard-earned money to anyone.

If you are struggling to pay back bills, a bankruptcy lawyer will help you decide if you qualify for Chapter 7 which will provide you a fresh financial start or Chapter 13 which is a true debt capping and consolidation tool supported by the law.

According to Michigan bankruptcy law, a Chapter 13 bankruptcy is the only choice if you are behind on your mortgage and you want to keep your property, at the end of the bankruptcy process. Or, if you have previously filed a Chapter 7 bankruptcy anytime in the past 8 years.

Then of course, there are student loans.

With the cost of higher education ever increasing, many Americans are finding themselves burdened with student loan debt. A recent estimate shows roughly 40 million Americans hold over $1.2 trillion in educational debt, and many are struggling to pay.

Since students loans are generally not dischargeable in bankruptcy it is important to stay in contact with your lender, and know what options are out there for your specific circumstances.

If you hold a federal student loan, you can look into deferring payments. Other options include Income-Based Repayment and Pay As You Earn which cap your monthly payments at a reasonable percentage of your income each year, and forgive any debt remaining after no more than 25 years (depending on the plan) of affordable payments.

Forgiveness may be available after just 10 years of these payments for borrowers in the public and nonprofit sectors

It’s not wise to sit back and ignore your student loans since unpaid student loans can affect your Social Security down the road.

Generally, social security income is considered judgment proof and typical creditors cannot seize your Social Security Income. However, non-dischargable debt like student loans, unpaid taxes and back child support can be seized from your Social Security payments.

The best course of action with student loans is to work closely with the lender to pay down the amount. Although it is possible, in rare cases, to have student loans discharged in a bankruptcy, it is a difficult and expensive process that exceeds the scope of a typical bankruptcy.

The take home message for everyone suffering from financial stress is to seek the opinion of an experienced bankruptcy attorney BEFORE you decide on a course of action. Consulting with an Upper Peninsula Bankruptcy Lawyer at Church and Korhonen, PC is a free and confidential service that will likely provide useful information and hope. Call before you take matters into your own hands. (800) 758-5611 or in Marquette, MI (906)226-0001.

Eight Steps to a Financial Fresh Start by Filing a Chapter 7 bankruptcy

What is the process for filing Chapter 7 bankruptcy with Upper Peninsula Bankruptcy Lawyers Church and Korhonen, PC?

Filing for Chapter 7 Bankruptcy is a process that requires time, effort and paying the required fees. To better understand how a case is filed, we have included a general overview of the steps involved. Not all cases are the same and some cases will involve more or less time, but you should be able to get a general sense of what to expect if you are considering filing Chapter 7 bankruptcy.

STEP ONE: Schedule an initial, free consultation with an Upper Peninsula Bankruptcy Lawyer at Church and Korhonen, PC. You can have a telephone or in-person consultation, it is up to you. Normally, you can schedule a consult within 48 business hours of calling (906) 226-0001.

STEP TWO: After learning your options from the free, initial consultation, determine whether you should file for Chapter 7 Bankruptcy and whether you can provide all the documentation necessary and pay the required attorney’s fees within 5 months.

STEP THREE: Retain Upper Peninsula Bankruptcy Lawyers Church and Korhonen, PC and stop paying any additional money for debt that will be discharged in your bankruptcy.

STEP FOUR: Provide ALL necessary documentation and attorney’s fees to Church and Korhonen, PC as soon as possible. The documentation you provide will be the basis for your Bankruptcy Petition, Schedules and Statement of Financial Affairs.

STEP FIVE: We file your Bankruptcy Petition with the US Bankruptcy Court. This is the event that STOPS ALL Creditors from taking further action against you. It will stop creditor contact, law suits, garnishments, asset seizures etc.

STEP SIX: Four to six weeks after your Bankruptcy Petition is filed you will have a 341 Creditors Meeting at the US Bankruptcy Court on the 3 floor of the Marquette Post Office building. You MUST attend this hearing.

STEP SEVEN: Typically, 60 days after the 341 Creditors’ meeting, your debts will be discharged.

STEP EIGHT: 30 days after discharge your Bankruptcy case will be closed because you have completed the Bankruptcy process.

If you are looking for a financial fresh start, now is the time. For a free consultation, contact Church and Korhonen today at 1.800.758.5611.

Unpaid Credit Card Debt can Create an Income Tax Liability for Consumers: Beware!

Did you know that failing to pay back credit card or other unsecured debt you were obligated to pay back to a commercial lender may create an income tax liability for you?

Yes, sometimes, it’s true.

If you fail to pay back money that you borrowed from a commercial lender, be it on credit card or other unsecured debt, and the lender later cancels or forgives the debt, you may have to include the cancelled amount as income for tax purposes, depending on your specific circumstances.

When you borrowed the money you were not required to include the loan proceeds in income because you had an obligation to repay the lender. When the obligation is later forgiven, the amount you received as loan proceeds is normally reportable as income because you no longer have an obligation to repay the lender. The lender is usually required to report the amount of the canceled debt to you and the Internal Revenue Service on Form 1099-C, Cancellation of Debt.

However, there are some exceptions that may allow a taxpayer to escape paying tax on all or part of cancellation of debt income to be reported on your Form 1099-C. The most common situations when cancellation of debt income from credit card and other unsecured debt are not taxable is:

  • Bankruptcy: Debts discharged through bankruptcy are not considered taxable income.
  • Insolvency: If you are insolvent when the debt was canceled, part or all the canceled debt may not be taxable to you. You are insolvent when your total debts are more than the fair market value of your total assets. Normally, you are not required to include forgiven debts in income to the extent that you are insolvent.

If you find yourself facing tax liability because you’ve stopped paying your credit cards and the card company reported the issue to the IRS, contact the Upper Peninsula Bankruptcy Lawyers at Church and Korhonen, PC for a free initial consultation to see if bankruptcy can resolve your tax liability.

Did you know Abraham Lincoln filed bankruptcy more than once?

Nearly every person I speak to regarding the need to file bankruptcy tells me how ashamed they feel by the prospect of going bankrupt. They explain to me how they have always paid their bills and that no matter how hard they try, they cannot pay down their debts and are falling further and further behind. They feel they are alone, hopeless and are filled with despair. They feel they are bad people because of their financial situation and somehow deserve to suffer harsh consequences.

The purpose of this post is dispel the perceived stigma of bankruptcy. The stigma affects a person’s decision to exercise their Constitutional Rights and release themselves from overwhelming debt by getting a fresh start.

To begin with, it is creditors who promote the moral stigma of bankruptcy and make consumers feel terrible because they can no longer afford to pay their bills. And why not? Creditors have everything to gain by shaming, cajoling, browbeating and intimidating consumers into not filing bankruptcy. Creditors don’t tell consumers their legal options under the law because those options are not pro table to the creditor. Don’t expect creditors to tell you the truth about your legal rights in relation to your debt. Expect them to manipulate you into giving them all your money.

Most people don’t realize bankruptcy relief has a long history dating as far back as the Bible. In Deut. 15 1-2 the Bible itself provides for the periodic release from debts: ” At the end of every seven years thou shalt make a release. And this is the manner of release: every creditor shall release that which he has lent unto his neighbor and his brother; because the Lord’s release hath been proclaimed.”

Bankruptcy is every citizen’s right under under the law, provided for in the Constitution, intended to provide a fresh start for those financial distress and that many famous people and businesses have  led for bankruptcy protection in the past and continue to do so today.

Many of America’s political, business and entertainment leaders have gotten a fresh start by  ling bankruptcy. For example, did you know Thomas Jefferson (our 3rd President) and Abraham Lincoln (our 16th President) both filed bankruptcy several times? (And, they are not the only US Presidents who have done so.) In addition, Walt Disney, Henry Ford and P.T. Barnum also exercised their legal rights and filed for bankruptcy when their financial situations called for it.

Why should bankruptcy laws only apply to the famous, smart or wealthy citizens of these United States? The answer is they don’t: the legal right to file bankruptcy is protected in the U.S. Constitution and US laws. They apply to everyone equally. This includes you!

Call the Upper Peninsula Bankruptcy Lawyers: Church and Korhonen, PC today to see if you qualify for filing bankruptcy just like Abraham Lincoln, Thomas Jefferson, Walt Disney and so many other famous people have done countless time in the past.

What’s good for the famous can be good for you too.

Should I file bankruptcy?

Filing for bankruptcy is a decision that needs to be made after weighing all your options. However, if you have lost your job, experienced unexpected medical expenses or suffered a significant unexpected loss, you may want to call Church and Korhonen, PC today to see if you should file for bankruptcy.

#1 Reason For Filing Bankruptcy: Medical Expenses

Medical expenses are the top reason Americans are going bankrupt and it’s expected that nearly 60% of bankruptcies happen because of unavoidable, overwhelming medical debt. Many people mistakenly believe that it’s only those without health insurance who have excessive medical debt, and while the uninsured might be a part of the problem, it isn’t just people without insurance that see bankruptcies as their only option.
One catastrophic illness or injury could cost a patient hundreds of thousands of dollars, which could wipe out a person’s savings account in just a few weeks. Insurance co-pays, co-insurance costs and high deductibles, coupled with a long-term healthcare need means that someone without any additional debt could be struggling to keep up with payments after they’re healthy again.

#2 Reason For Filing: Job Loss

The second main reason Americans are struggling to keep with their debt is the economy. Many people, even those who assumed that they had a steady, stable job, have been saddled with a job loss. In years past, when the economy was on an uptake, it might have been easier to find a replacement job, but now, many people are relying on meager unemployment benefits in order to stay afloat financially. However, these benefits don’t last forever, and some people struggle to find a job before the unemployment benefits stop.

#3 Reason For Filing: Unexpected Expenses Due To Act Of Nature

Yet another reason people are forced to call bankruptcy lawyers is an act of nature. A flood, hurricane, tornado or fires can cause severe devastation and ruin your financial stability. If you’re not properly insured, you could be forced to pay to rebuild your life entirely by yourself.
These are the top three reasons over 1,185,238 people filed for bankruptcy last year. If you are experiencing any of these catastrophes, and live in the Upper Peninsula of Michigan, call and speak with a Church and Korhonen attorney today. Hope and help may be a phone call away.

Bankruptcy and Future Debt

Many people ask if filing bankruptcy will discharge future debt incurred after their bankruptcy petition is filed. The answer is NO. A bankruptcy discharges debt that was incurred PRIOR to the date the petition is filed, not any new debt incurred after filing.

If you file a bankruptcy petition on April 1, 2013, all dischargable debt you incurred prior to April 1, 2013 will be discharged in the bankruptcy. It doesn’t matter how old the debt is, it will be discharged. However, if you acquire new debt after filing the petition on April 2, 2013, that new debt WILL NOT be discharged in your bankruptcy.

As an example, let’s say Henry files a Chapter 7 bankruptcy on April 1, 2013 but has to undergo emergency surgery April 2, 2013. The new debt from the medical emergency will not be discharged and Henry will need to wait 8 years to before he can file another Chapter 7 bankruptcy to discharge that medical debt. Until then, if Henry fails to pay the medical bill, he can be sued, judgments entered against him, his wages garnished and his state tax refunds intercepted.

If you are considering filing bankruptcy it is important to understand this reality. Call Church and Korhonen, PC for a free bankruptcy consultation today if you live in any of the Upper Peninsula locales (800) 758-5611 or local in Marquette, MI (906) 226-0001.

Have you been garnished? You may be able to get your money back if you file Bankruptcy.

If a creditor sues you and gets a judgment against you they may garnish your paycheck, tax refund and bank accounts.

When your paycheck, refund or account is garnished, the creditor takes your money and you no longer have access to it.

If there is a judgment against you, you may want to wait to file your tax return so the creditor can’t take your refund. If you have money in accounts you may want to take the money out for safekeeping.

If this is happening to you, there is some good news.

If you file for bankruptcy protection in Michigan and if more than $600 has been taken by a single creditor within 90 days of filing, you may be able to get that money back.

Filing bankruptcy could mean your garnished wages, tax refunds and bank account funds could be paid pack IF the creditor took more than $600 within the 3 months before you filed your petition.

If you are being garnished, it would be wise to speak to a bankruptcy lawyer to see if you can have your hard-earned money returned to you.

If you live anywhere in the Upper Peninsula, including any of these counties, call today for a free bankruptcy consultation with an attorney. Alger, Baraga, Chippewa, Delta, Dickinson, Gogebic, Houghton, Iron, Keweenaw, Luce, Mackinac, Marquette, Menominee, Ontonagon, and Schoolcraft.

Church and Korhonen attorneys will help you receive every penny you are entitled to under the law.

One of my creditors sued and got a judgment against me. What could happen?

If you owe money to a creditor, like a credit card company, a bank or hospital, the creditor has a right to sue you for the money if you fail to pay them back. It is not enough to simply file a law suit against you, the creditor must obtain a judgement from a court having jurisdiction over you stating that you do, in fact, owe the money.

Once a creditor has a valid judgment in hand, they may ask for an order to garnish your wages, your bank accounts and/or your tax refunds. An order for garnishment allows the creditor to seize your money from savings and/or checking accounts, paychecks and tax refunds until the amount owed is paid in full.

If this is happening to you, you can do a few things to protect your assets.

First and foremost, you can file a bankruptcy petition in the state where you live. There is a U.S. Bankruptcy Court representing every geographic area in the country. For instance, if you live in the Upper Peninsula of Michigan, you would file your petition with the U.S. Bankruptcy Court of the Western District of Michigan. The court is physically located in Marquette, MI. Filing a bankruptcy petition creates an automatic stay stopping all attempts to enforce judgments such as garnishments, lawsuits and property seizures.

If you intend to file bankruptcy, you may want to hold off on filing your state tax return until after the petition is filed. Most garnished tax refunds are from state taxes. If you delay filing your state return until after you file your bankruptcy petition, the automatic bankruptcy stay will protect your state refund from permanent seizure.

Another option is not to keep funds in any bank account that could be subject to garnishment. A creditor can only seize the money that’s in the account. If there is no money in the account, there is nothing to seize.

If your wages are being garnished, filing bankruptcy will stop the garnishment.

If you live in the Upper Peninsula of Michigan and are facing garnishment, you are not alone. The attorneys at Church and Korhonen are available to discuss your situation and advise you if you qualify for bankruptcy. Call today and stop the garnishments.

Do I need to hire an attorney to file bankruptcy?

You do not need to hire an attorney to file bankruptcy. Some people choose to represent themselves in a bankruptcy case.

That being said, bankruptcy proceedings can be complex and lengthy. If done incorrectly, the results can be catastrophic. For example you could lose your home or other valuables.

Before you decide to represent yourself in a bankruptcy case, call an attorney who focuses on bankruptcy law in your geographic area.

An knowledgeable attorney should be able to interview you and determine whether you qualify for bankruptcy (not everyone does), whether your specific circumstances warrant bankruptcy (perhaps debt negotiation would be a quicker, less expensive way to help you out of debt), which chapter of bankruptcy

would be right for you (generally, consumers file either Chapter 7 or Chapter 13 bankruptcy. The overwhelming majority of people file for relief under Chapter 7. You need to know the difference and which chapter is right for you) and whether you will be able to keep all your belongings, including your

vehicles and home, should you file.

Church and Korhonen, PC was founded by lawyers Cathy Church and Cara Korhonen in 2010 specifically to help people file bankruptcy.

The office is physically located in Marquette, MI because the US Bankruptcy Court is located in Marquette. Anyone who resides in the Upper Peninsula of Michigan whether in the Soo , Marquette, Menominee, Calumet or beyond must file their bankruptcy in Marquette.

We are set up to conduct 99% of our business over the phone, through the mail or over the Internet. You do not need to travel to Marquette to be interviewed or retain our firm. We work with people all over the UP and most folks come to Marquette only one time during their bankruptcy case.

The one time you must travel to Marquette is 6 weeks after your bankruptcy petition is filed. There is a mandatory meeting called the 341 meeting and all people who file for bankruptcy must attend this one meeting. Aside from that one meeting, there is generally no need to travel to Marquette.

If you are in financial stress and would like to know whether you qualify for bankruptcy, call Church and Korhonen, PC today at 906.758.5611. A knowledgeable attorney will interview you over the phone, at no charge, and advise you about your options.

If you live anywhere in the Upper Peninsula of Michigan call Church and Korhonen, PC today!

Do you live in Ahmeek, Atlantic Mine, Autrain, Baraga, Bergland, Big Bay, Big Bay De Noc, Brevort Lake, Brimley, Calumet, Cedar River, Channing, Chassell, Christmas, Copper Harbor, Crystal Falls, Curtis, Deerton, Dollar Bay, DeTour, Eagle Harbor, Epoufette, Escanaba, Felch, Gaastra, Garden, Germfask,

Could City, Grand Marais, Gulliver, Gwinn, Hancock, Houghton, Hulbert, Iron Mountain, Iron River, Ironwood, Ishpeming, Keweenaw, Lake Linden, L’Anse, Mackinac Island, Manistique, Marenesco, Marquette, Mass City, Menominee, Michigamme, Mohawk, Munising, Naubinway, Newberry, Norway, Ontonagon,

Rapid River, Republic, Sault Ste. Marie, Seney, Shelter Bay, Silver City, St. Ignace, Stephenson, Tapiola, Trout Creek, Trout Lake, Twin Lakes, Watersmeet, or White Pine? Call Church and Korhonen, PC today! 800.758-5611

If my debts were discharged in bankruptcy, how long must I wait to file for bankruptcy protection again?

This is a very good question, and a bit tricky depending on the circumstances.

First, you need to know if your debts were discharged under Chapter 7 or 13 . The rules are different for each.

Secondly, it depends on which Chapter you want to file this time.

Here are the general rules:

Filing Under the Same Bankruptcy Chapter: Chapter 7 v. Chapter 13

If you are filing under the same bankruptcy chapter, the time frames are different depending on whether you are filing for successive Chapter 7 or Chapter 13 cases.

Successive Chapter 7 Cases

If you received your first discharge under a Chapter 7, you cannot receive a second discharge in any Chapter 7 case that is 􀂆led within eight years from the date that the first case was filed.

Successive Chapter 13 Cases

If you received your first discharge under Chapter 13, you cannot receive a second discharge in any Chapter 13 case that is filed within two years from the date that the first case was filed.

This can get tricky if you file your second Chapter 13 case between two and six years from the first Chapter 13 and the court refuses to confirm your Chapter 13 plan in the second case. Normally, if your plan is not confirmed you could convert to a Chapter 7 case. But in this situation, the rules for receiving a Chapter 7 discharge after a Chapter 13 discharge would kick in (see below) and prevent you from getting a discharge in the converted case.

Filing Under Different Chapters: The Order Matters

If the second bankruptcy case you want to file is under a chapter that is different from the chapter you received your first discharge under, the order determines the time frame.

Chapter 13, Then Chapter 7

If your first discharge was granted under Chapter 13, you cannot receive a discharge under any Chapter 7 case that is filed within six years from the date that the Chapter 13 was filed. The only exceptions to the six-year waiting period are:

if you paid all unsecured creditors in full in the Chapter 13, or if you paid at least 70% of the claims in the Chapter 13 and the plan was proposed in good faith and was your best effort.

Chapter 7, Then Chapter 13

If your first discharge was granted under Chapter 7, you cannot receive a discharge under any Chapter 13 case that is filed within four years from the date that the Chapter 7 was filed.

This can get tricky if you file your second case (the Chapter 13) between four and eight years after the Chapter 7 case and the court does not confirm your Chapter 13 plan. Normally, if your Chapter 13 plan is not confirmed, you could convert the case to a Chapter 7 bankruptcy. However, in this situation, the rules for successive Chapter 7 discharges would kick in, preventing you from getting a discharge in the converted case. In this case, it might make sense to simply dismiss the Chapter 13 case.


Call and speak to a Church and Korhonen, PC bankruptcy lawyer, (800)758-5611 today if you live in the Upper Peninsula.